The growth of online video services (OTT) continues, and the replacement effect on existing paid broadcasting has intensified, according to analysis.
The Korea Communications Commission and the Korea Information Society Development Institute released an analysis report titled 'Major Status of OTT and Its Impact on the Broadcasting Market' on the 13th. Last year's total broadcasting revenue decreased by 4.7% compared to the previous year, while the revenues of major OTT services such as Netflix, Wavve, and Tving increased by 6.4%.
Additionally, the usage rate of OTT grew from 69.5% in 2021 to 72% in 2022, and is projected to reach 77% in 2024, while the percentage of paid users increased from 50.1% to 55.9% and then to 57% during the same period. This year's survey results showed that among paid OTT users, the average number of subscriptions was 2.8, indicating that multi-subscription remains active, and responses indicated that the payment amount had increased (40%) or remained similar (52.5%) compared to the previous year.
Meanwhile, the number of monthly active users (MAU) of major paid OTT services surged until 2021 but has fluctuated since, showing gradual growth with 30.19 million in 2022, 34.58 million in 2023, and 32.39 million in June 2024. In contrast, YouTube, a free ad-supported service, saw its MAU rise to 43.65 million in 2021, 45.14 million in 2022, 45.65 million in 2023, and reached 46.25 million in June 2024. The average daily usage time also increased during the same period to 68.7 minutes, 72.1 minutes, 79.7 minutes, and 80.8 minutes.
The Korea Communications Commission noted that the activation of OTT usage is significantly applying competitive pressure on the paid broadcasting market, as evidenced by the decline in the number of paid broadcasting subscribers, viewing time, and the number of channels. Individual paid broadcasting subscribers decreased from 16.56 million in 2021 to 16.50 million in 2022 and further to 16.43 million in 2023.
Furthermore, this year's survey results indicated that 40.5% of respondents reported a decrease in their viewing time for real-time broadcasts through paid broadcasting after using OTT.
The Korea Communications Commission also projected that the replacement effect on paid broadcasting would increase due to the differentiation of OTT content, exclusive sports broadcasts, and the expansion of real-time broadcasting.
Moreover, as OTT platforms provide their own original content, competition between broadcasting companies and OTT platforms is also intensifying to secure quality content. Notably, production companies indicated a preference for OTT over broadcasting channel operators (PP) when supplying content to terrestrial broadcasters is not possible, suggesting significant substitutability between broadcasting companies and OTT.
Meanwhile, this year's survey results revealed that the percentage of advertisers perceiving OTT, such as YouTube, as more effective than real-time broadcast advertising has increased (from 34.3% in 2016 to 40.2% in 2024), indicating a likely rise in the proportion of advertisers choosing OTT over broadcast advertising in the future. The Korea Communications Commission plans to reflect the results of this analysis in this year's competitive situation assessment, which will be announced in the first half of next year.